Traditional loyalty (e.g., incentive award, frequency reward, etc.) programs have been around for years. Loyalty programs are typically used to help businesses develop and maintain participant loyalty and are used as marketing tools to develop new clientele. A frequent flyer program is an example of a typical loyalty program, where the more the participant uses a particular airline or group of affiliated airlines, the more frequent flyer miles the participant earns. After accumulating frequent flyer miles, the participant may choose to redeem those miles for upgrades in service or free airline tickets. Generally, these rewards programs have focused on providing discretionary and/or luxury benefits to consumers.
As competition in various markets increased, companies sought ways to expand loyalty programs to appeal to a broader cross-section of potential customers. One way this was accomplished was by developing strategic partnerships and affiliations with other business sectors. For example, hotel chains, airlines and rental car agencies developed loyalty program partnerships and affiliations, while transaction card companies also joined in to promote a more comprehensive and appealing loyalty program. While these strategies have been somewhat successful they still provide discretionary type benefits. Given the shift from discretionary to non-discretionary spending, there is a need to provide loyalty incentives that can be applied to everyday type purchases.